Mubadala Development Company and the Abu Dhabi Education Council have secured a US$325 million (Dh1.1bn) syndicated loan amid particularly difficult conditions for the loan market. The loan, which has a 20 year term, is intended to finance the Paris-Sorbonne University Abu Dhabi public-private partnership project and is the first of its kind for an Abu Dhabi government owned entity. It follows the issuance of a AA long term credit rating for Mubadala in September.
"This partnership between the private and the government sector provides an opportunity for the governmental sector to harvest the private sector's expertise in managing projects effectively," said Dr Mugheer Khamis al Khalili, director general of Adec. Analysts say that in a tightening credit market it is easier for a state-owned entity like Mubadala to secure a syndicated loan than it would be for a private concern, because of the backing it enjoys from the Abu Dhabi government.
"Banks lending to [Mubadala] would have a lot more comfort and reassurance in terms of credit risk as it is owned and backed by the Abu Dhabi government," said Chavan Bhogaita, head of credit research at HSBC Middle East. The transaction closed yesterday with a twenty year term in place and was oversubscribed through mandated lead managers First Gulf Bank, Bank of Tokyo-Mitsubishi, BNP Paribas, Calyon, Royal Bank of Scotland and Sumitomo Mitsui Banking Corporation.